We are happy to discuss on a no-charge, no obligation basis, any potential assignment. Where appropriate we will submit a proposal detailing our understanding of the challenges you face and how, together, we can investigate and respond to them.

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Chartered Accountants Melbourne Australia

Schwarz & Reynolds Chartered Accountants is a Melbourne based independent advisory firm specialising in the provision of financial and strategic advice for Small to Medium sized enterprises, Family Groups, High Net Worth Individuals and Self Managed Super Funds (SMSF).

With offices and dedicated resources located in Melbourne, Australia we enjoy the benefits of access to extensive resources and partners.We take every opportunity to share these benefits with our clients and investee businesses alike.By working closely with our clients and their other business advisors we ensure optimal business solutions are achieved.

We closely monitor industry trends and business specific events with a view to identifying lead indicators that may ultimately result in the release of value for our clients.We continuously review markets to identify potential opportunities for our clients to maximise their sustainable competitive advantage.

Our firm is founded on the following core values

  • Quality Service
  • Professionalism
  • Confidentiality
  • Independence
  • Positive business outcomes
  • Our networks' well being
 

We maximize value for our clients by offering project management services and facilitating solutions in the following areas

The diverse qualifications of our people enable us to deliver tangible value to our clients. Our monitoring of current industry standards and dedication to professional development enables us to provide:

  • high quality processes,
  • an objective view of technology and
  • compliance with the latest legislative developments.
  • We understand the dynamics of business growth, not just the numbers.

We are happy to discuss on a no-charge, no obligation basis, any potential assignment. Where appropriate we will submit a proposal detailing our understanding of the opportunities that you are currently presented with and how, together, we can investigate and respond to them.

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What's New at Schwarz & Reynolds

Resident personal tax rates for the 2017/18 year
$0 – $18,200               Nil
$18,201 – $37,000        19% of amount over $18,200
$37,001 – $87,000        $3,572 plus 32.5% of amount over $37,000
$87,001 – $180,000      $19,822 plus 37% of amount over $87,000
Over $180,000            $54,232 plus 45% of amount over $180,000
(The marginal rates do not include Medicare levy of 2%.)

Non Resident personal tax rates for the 2017/18 year
$0 – $87,000               32.5%
$87,001 – $180,000     $28,275 plus 37% of amount over $87,000
Over $180,000            $62,685 plus 45% of amount over $180,000

The Medicare levy low-income threshold for 2017-18 will increase for individuals (A$21,655), families (A$36,541), each dependent child or student (A$3,356) and individuals eligible for the Seniors and Pensions Tax Offset (A$34,244).

FBT
Fringe benefits tax (FBT) is 47%

Superannuation changes

Contributions caps
From July 1, 2017, the concessional contributions cap for all individuals is A$25,000. and the non concessional contributions cap for all individuals is $100,000 (bring forward rules still apply)

Excess contributions tax (ECT)
The Government will modify the taxation of excess concessional superannuation contributions made so that the excess contributions are taxed at the individual’s marginal tax rate, plus an interest charge. Such excess contributions are currently taxed on contribution at 15% and then when the contributions are identified as being over the cap at 31.5% to the member. Individuals will also be able to withdraw any excess concessional contributions from their superannuation fund. 

High income earners superannuation contributions tax
• Individuals whose ATI is more than $250,000 will have their concessional contributions taxed in the fund at 30 per cent.
• Individuals whose ATI is $300,000 or less will continue to have their concessional contributions taxed in the fund at 15 per cent.

Those individuals whose ATI exceeds $250,000 solely because of the inclusion of concessional superannuation contributions in the calculation of their ATI will have their contributions taxed at the rate of 30 per cent only on the amount that has caused the ATI to exceed $250,000.

From July 1, 2017 the government introduced a cap of $1.6m limiting the amount of super that can be transferred into retirement phase (pension phase).  This can will be indexed in $100,000 increments in line with CPI increases.  If an individual exceeds their transfer balance cap, the balance must be commuted to the member's accumulated balance.  The member will also be liable for excess transfer balance tax on their excess transfer balance earnings to neutralise the benefit received from having excess capital in their earnings tax exempt retirement phase. 

The flat 15 per cent tax on earnings within the superannuation fund and the tax exemption for assets supporting pension payments are to remain provided the fund does not exceed the pension cap. 


Year-end planning
The end of the financial year is fast approaching and it’s time to start planning to prepare for your 2017 Income Tax Return. Now is a good time to start thinking about your tax affairs. Some things you could look at are:
 
• Make sure you gather all your receipts to claim work-related expenses that exceed $300;
• Consider whether any tax offsets are available to you – do you have large medical expenses you could claim an offset for? Are you entitled to the Low Income Tax Offset? Are there any other tax offsets for dependents you might be entitled to?
• Making additional contributions to your superfund – should you top up super contributions this year?
• Think about whether you had planned to make any donations to deductible gift recipients and making those donations (and getting a receipt for them) before the financial year ends; and
• If you have a rental property, think about what expenses you might be able to claim against the rental income you have earned.

Seven red flags for the ATO which your small business should try to avoid:

Business sales
The sales activity of a small business can attract a range of capital gains tax concessions, but strict qualification rules apply. The ATO examines these transactions closely. There are a lot of cases each year where the ATO takes people to court arguing that they don't meet the small business definition.  If you've got those in your tax return, make sure you've taken some care to get the calculations right and make sure you genuinely qualify.

Loans to shareholders
This is one of the biggest red flags.  Companies have to follow very specific rules and obligations if they lend money to a shareholder. The ATO wants to stop business owners avoiding tax by “borrowing” money from their company, so will want proof that any loan is genuine, with a loan document and regular interest and principle payments. Otherwise they will treat the loan as a dividend and collect tax on it.

Fuel tax credits
Many businesses are entitled to credits for fuel tax for machinery and heavy vehicles, but the ATO says “incorrect or ineligible fuel tax credit claims continue to be made as a result of taxpayers misunderstanding their entitlements or poor record keeping”. It warns that serious breaches will result in prosecution.

Late payments
The ATO will take notice if a taxpayer lodges several late company returns or several late Business Activity Statements all at the same time.  If you lodge them all at the same time you can expect that they're probably going to be a little more closely vetted than if you were lodging returns on time.  Also, businesses need to ensure that the annual total of the BAS returns matches the annual sale number on the tax return. “Obviously if there's a discrepancy in those numbers, that indicates a problem.  Any discrepancies should be explored before you lodge.

Home office expenses
Getting a tax deduction for part of the home phone and power is an attractive idea, but claims for home office expenses will also catch the eye of the ATO. There are pretty strict rules around home offices and the deductions you can claim for them.  There are different rules that apply when you actually carry on your business from home, such that your home is your principal place of business, versus the situation whereby you merely use your home for convenience and do some work from home.
For the second category, taxpayers need to substantiate their claim by keeping a diary for a month of the work they do at home to demonstrate their work patterns.

Business and personal bank accounts
Many small business owners have a single bank account for personal and business use; this is a red flag to the ATO and should be avoided.  Ensure you clearly separate business and personal expenses.

ASIC fees
Annual review for a proprietary company $254
Application for registration as an Australian company $460
Company voluntary deregistration fee $38

Prepaying ASIC fees
Companies and schemes can choose to pay their annual review fees in advance for a period of 10 years by a single payment at a discounted rate.
 
Advance payment will protect a company or scheme from future fee increases for the term of the payment
 
Once the fee is paid, no refund will be available.  This can also be done by SMSF corporate trustee companies.

Please email us at enquiry@sraccountants.com.au or call us on +61 3 9853 1587 to find out more.